Business

Taxes

Businesses in the City of Lone Tree benefit from one of the most favorable tax climates in the nation:

  • Colorado ranks among the top 20 states for best corporate tax system and business-friendly tax climate according to the Tax Foundation's State Business Tax Climate Index 2015
  • Colorado ranks in the top 10 best states for taxes on entrepreneurship and small businesses (Small Business and Entrepreneurship Council’s Business Tax Index 2014)

Corporate Income Tax

Colorado's corporate income tax is a flat 4.63 percent. It is assessed on Colorado net income, defined as the corporation's federal taxable income, with some modifications.

Beginning in January 1, 2009, multi-state corporations with operations in Colorado are taxed using single-factor apportionment. This simplified approach allows companies to pay taxes based solely on their sales within Colorado.

Sales and Use Taxes

Colorado's 2.9 percent sales or use tax on goods purchased by a business that are not intended for resale is the lowest among the 45 states that collect sales tax. The City of Lone Tree collects a 1.8125 percent use tax on the purchase of any tangible property on which sales tax was not paid. Services are not taxed, only sales of non-food items, with the exception of soda and candy.

Major Sales Tax Exemptions:

  • Purchases of manufacturing equipment or machine tools of over $500
  • Component parts
  • Fuels and electricity used for agriculture, railroad transportation, and power generation
  • Ink and newsprint
  • Aircraft parts used in general maintenance
  • Interstate long distance telephone charges
  • Farm equipment and machinery
  • Some packaging materials
  • Products made from Pine Beetle wood

Various special districts impose additional sales taxes on the City of Lone Tree, including the Regional Transportation District (RTD) and the Cultural Facilities District (SCFD).

Lone Tree Sales/Use Tax Rate At-a-Glance:

State of Colorado

2.9%

Douglas County

1.0%

Regional Transportation District

1.0%

Scientific and Cultural Facilities District

0.1%

City of Lone Tree

1.8125%

TOTAL

6.8125%

Registering Your Business with the City of Lone Tree

The City of Lone Tree requires businesses to obtain a City business license and register to collect the City's sales and use tax, if that applies to their business.

Business-Only Licenses do not expire and require no renewal.  Business Retail Sales/Use Tax Licenses are renewed on a biennial basis, every even numbered year.  New businesses are required to submit an application prior to opening.

Occupational Tax

The City of Lone Tree does not assess an occupational tax.

Individual Income Tax

Colorado assesses a flat tax of 4.63 percent of an individual's taxable federal income, ranking Colorado the sixth lowest among states that levy an individual income tax, according to the U.S. Census Bureau. Colorado's low individual income tax rate results in an extremely competitive tax environment compared to other states for small businesses.  

Unemployment Insurance Taxes

Colorado's unemployment insurance rates vary among established employers,depending upon the history of taxes and benefits paid, and the Unemployment Insurance Fund balance.

The majority of new employers are charged a tax based on three separate factors with a combined rate of 3.12 percent on the first $10,000 of each employee’s calendar year earning, as follows:

  • Beginning base rate: 1.7 percent
  • Annually computed surtax: .22 percent
  • Solvency tax surcharge: 1.2 percent

Specific information on the tax rate can be obtained from the Colorado Department of Labor.

Worker's Compensation

Workers' compensation insurance is provided by over 200 private insurance companies and the State Compensation Insurance Fund, d.b.a. Pinnacol Assurance, an independent political subdivision of the state, which operates as a workers' compensation insurance company.  Colorado's rates are among the lowest in the country.

Property Taxes

The City of Lone Tree and State of Colorado do not impose property taxes on businesses.  Instead, a typical business would see a property tax bill from Douglas County Schools, Douglas County, and a variety of special districts (such as the South Metro Fire Protection District). Commercial and industrial property is assessed for property tax purposes at 29% of market value.

Lodging Tax

The City of Lone Tree collects a 6.0% Lodging Tax upon the renting or leasing of lodging accommodations in the City for less than sixty consecutive days. 


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